Question 3 Answer A and B

AB

Issuing Bonds at a Discount On the first day of the fiscal year, a company issues a $7,600,000, 6%, 6-year bond that pays semiannual interest of $228,000 ($7,600,000 6% x 12), receiving cash of $6,886,734. Journalize the bond issuance. If an amount box does not require an entry, leave it blank. Cash Discount on Bonds Payable Bonds Payable Discount Amortization On the first day of the fiscal year, a company issues a $7,600,000, 10%, 4-year bond that pays semiannual interest of $380,000 ($7,600,000 10% x 12), receiving cash of $7,128,057. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense Discount on Bonds Payable Cash 380,000